Taking a cue from Disney and other less “fancy” video streaming platforms, Netflix administrators have agreed to introduce sponsored subscriptions, paid for in part by inserting ads at certain points in the viewing experience.
According to Netflix administrators, the new option only adds to existing subscriptions, providing an extra solution for those who can’t afford the cost of the premium version of the service.
However, Netflix isn’t revealing exactly how much the new subscription option will cut from the final price. The only thing we know for sure is that the ad-sponsored subscription plan comes at direct odds with the brand positioning, with company administrators more likely wanting to keep Netflix as a premium-only content brand without the compromises of other content services.
Unfortunately, the reality of worsening global economic conditions has also hit Netflix’s business hard, with the company reporting its first loss of subscribers in more than a decade, following up by laying off hundreds of employees earlier this year.
According to official data, Netflix lost 200,000 subscribers between January and March, compared to the 2.5 million analysts expected the company to add during the period. Netflix also now expects to lose another two million subscribers between April and June 2022, defying analysts’ expectations that predicted a continuation of the upward trend for the period.
Netflix said it has selected Microsoft for its global advertising platform, with the company to be the sales partner responsible for facilitating the new “lower-priced subscription plan”, managing ads served on the video streaming platform.
Preparing for the transition to much stricter “monetization” of existing customers, the company also recently revealed that it plans to charge users who are detected using other subscribers’ accounts. How these accounts will be detected is unclear, however, but the company says it can see when users of a single account are not using it in the same household. This could be done based on IP, but it’s not exactly clear how mobile devices, such as smartphones using 4G and 5G data connections, are handled.
Those who are identified using the same username on multiple devices will be asked to associate their Netflix identity with their own email address, which they can add to their primary account. Subsequently, each user who is added to a master account will be required to contribute to the cost of the subscription in order to continue to access their personal profile in this way. It will also be possible to migrate profiles attached to certain accounts to a personal account, which users will pay for at full price, with or without the deduction granted by accepting the display of advertisements.